FDIC Fair Lending Hot Topics Teleconference 12/18/12

Earlier this week the FDIC held one of their Banker Teleconference Series on Fair Lending Topics. The teleconference was broken into four sections: an overview of the fair lending exam process, criteria interviews and statistical analysis, third party providers and fair lending risk and best practices. You can find a link to the complete presentation at the bottom of this blog post. For the purposes of this blog, the focus is on the FDIC’s eleven fair lending best practices because they suggest areas an institution should be particularly aware of as they build their fair lending program or as they review their program in preparation for an upcoming exam. In other words, the bank should be able to demonstrate/show to an examiner:

Commitment of Board and Senior Management to a compliance management program as well as provide the necessary resources for the compliance function to do its job.

Proper documentation of all of the institution’s activities.

Consistent policies and procedures for the pre-application and application processes.

Perform Self-tests and self-evaluations as appropriate for the institution. Self-tests are based on newly created data such as the data created during mystery shopping while self-evaluations manipulate existing data. When you analyze denial disparity ratios to assess underwriting risk, this is a self-evaluation.

Preiss&Associates has been doing custom fair lending analyses for more than 20 years. If you have fair lending questions, want to talk about your fair lending issues or have need for us to assist you with your fair lending program give us a call at 847-295-6881 or drop us an email at [email protected]